Far from celebrating the deficit’s decline, the usual suspects — fiscal-scold think tanks, inside-the-Beltway pundits — seem annoyed by the news. It’s a “false victory,” they declare. “Trillion dollar deficits are coming back,” they warn. And they’re furious with President Obama for saying that it’s time to get past “mindless austerity” and “manufactured crises.” He’s declaring mission accomplished, they say, when he should be making another push for entitlement reform.

All of which demonstrates a truth that has been apparent for a while, if you have been paying close attention: Deficit scolds actually love big budget deficits, and hate it when those deficits get smaller. Why? Because fears of a fiscal crisis — fears that they feed assiduously — are their best hope of getting what they really want: big cuts in social programs.

So, he unmasks them and then goes on to say:

But isn’t the falling deficit just a short-term blip, with the long-run outlook as dire as ever? Actually, no. Falling deficits right now have a lot to do with a strengthening economy plus some of that “mindless austerity” the president condemned. But there has also been a dramatic slowdown in the growth of health spending — and if that continues, the long-run fiscal outlook is much better than anyone thought possible not long ago. Yes, current projections still show a rising ratio of debt to G.D.P. starting some years from now, and uncomfortable levels of debt a generation from now. But given all the clear and present dangers we face, it’s hard to see why dealing with that distant and uncertain prospect should be any kind of policy priority.

That is, Paul Krugman is saying that

— he doesn’t think it’s necessary to deal with a possible long-term rising debt-to-GDP ratio now, because of the many other problems we still have to face; but he’s also implying that if the projection of such a rise holds later, then we will have to deal with it at that time;

— the lowered deficit now is due to both a strengthening economy and some austerity measures, thereby excluding the possibility that it is due to the recovering economy alone, in spite of the fiscal drag from reduced Government spending at the Federal level pulling in the opposite direction; and

— “. . . uncomfortable levels of debt a generation from now” are a possibility, implying that high levels of debt, and debt-to-GDP ratios mean something to the fiscal sustainability of Government spending in the United States.

Also, what he is not saying is that the deficit is far too low for a full employment US economy that can drive up wages and drive down inequality, courtesy of both major parties and the Administration, who made deficit reduction a priority since the stimulus bill passed in 2009. So what does this tell us about the thinking of the “progressive” economist with the greatest name recognition among the public and the Democratic Party faithful?